With its expansive coastline, growing maritime trade (both inland and outbound) and an extensive network of inland waterways, India’s maritime sector plays a vital role in boosting economic growth. In recent years, the sector has undergone a transformational shift in terms of adopting new technologies and sustainable practices to manage operations, improve efficiency and competitiveness, and mitigate environmental impacts. The sector is also witnessing an increase in port facility enhancement, with new areas being explored to shift from port development to port-led development. Moreover, owing to both external and internal dynamics, the maritime industry is becoming integrated with emerging global logistics and supply chain activities. As a conventional and priority sector, the government has provided continued budgetary support. It has allocated Rs 23.77 billion to the Ministry of Ports, Shipping and Waterways (MoPSW) in the 2024-25 budget, an increase of 7.12 per cent compared to the budget estimate of 2023-24. Apart from this, key ports such as Paradip, Deendayal and Jawaharlal Nehru Port have played an active role in shaping the sector.
Tracking traffic growth
Over the years, improvements in cargo capacity handling and reduction in turnaround time have contributed to the growth in traffic at Indian ports. Cargo traffic handled at major ports stood at 817.98 million tonnes (mt) in 2023-24, an increase of 4.38 per cent over 2022-23 (783.62 mt). During April-June 2024-25, the traffic at major ports stood at 208.4 mt, a 4.13 per cent increase over the corresponding period of 2023-24 (200.14 mt). Cargo traffic at non-major ports increased by 11.18 per cent in 2023-24 (721.05 mt) as compared to 2022-23 (648.54 mt). This is indicative of a shift in dynamics at Indian ports. During April-June 2024-25, the traffic at non-major ports stood at 184.22 mt, a 4.58 per cent increase over the corresponding period of 2023-24 (176.15 mt). The key commodities handled at Indian major and non-major ports are petroleum, oil and lubricants, coal and containers, reflecting the energy and logistics sectors’ role in driving the country’s port traffic. To further provide a push to cargo handling, the MoPSW has announced a comprehensive plan to achieve 10,000 mt of port capacity by 2047.
With the increasing cost of logistics, inland waterways are emerging as a potential mode of transportation. During 2023-24, national waterways (NW) handled 132.89 million metric tonnes (mmt) of traffic compared to 126.15 mmt in 2022-23, registering a growth of 5.34 per cent.
Policy moves
A plethora of initiatives are being undertaken by the government to boost Indian shipping. Recently, the MoPSW introduced two significant bills in the Lok Sabha – the Carriage of Goods by Sea Bill, 2024, and the Bills of Lading Bill, 2024. This is aimed at aligning Indian regulations with international standards and easing operations. Further, the Shipbuilding Financial Assistance Policy, which enables Indian shipyards to procure orders from domestic and international markets, has been amended to increase indigenous shipbuilding by incorporating modern technologies and machinery. Moreover, the Indian Register of Shipping’s Rules for Construction and Classification of Indian Naval Ships, 2023, were released, and rule-related requirements for technological advancements are being incorporated in the design of naval ships.
In order to incentivise Indian shipyards till 2035, the MoPSW is working on a new shipbuilding scheme. India is also planning to set up a new shipping company to expand its fleet by at least 1,000 ships in the next decade. In addition, a revised production-linked incentive scheme for containers has been proposed to boost the manufacturing of shipping-grade containers. The government is also developing a plan to increase the number of Indian flag vessels in the fleets of domestic and global shipping lines and to encourage importers and exporters to use them. Further, plans are being announced to set up shipbuilding and repair clusters in Mumbai, Kochi, Chennai, Gujarat, Goa, Visakhapatnam, Andaman & Nicobar Islands, and Odisha.
Port authorities are also taking initiatives to stimulate traffic growth. For instance, the Deendayal Port Authority (DPA) has launched the Strategic Actions to Aid Growth and Rewards scheme. It includes several key components (such as a minimum volume commitment of 0.5 mmt over 11 months and a new monthly licensing fee structure), and prioritises berthing for participating vessels. Additionally, the Board of Trustees of Syama Prasad Mookerjee Port, Kolkata, has introduced a new concession scheme to enhance vessel calls and provide frequent and seamless connections for the region’s export-import trade.
PPP potential in ports
The public-private partnership (PPP) model in the port sector did not receive much interest in the past because of its capital-intensive nature and long-term commitment. However, efforts are now being made to encourage the involvement of private players in the sector to increase efficiency and reduce logistics costs at ports. With regard to this, the government is working to shift to an 80 per cent landlord model by 2030 and aims to attain 100 per cent PPP at major ports by 2047. The Inland Waterways Authority of India has entered into an MoU with several private cargo owners/shippers/e-commerce companies to increase cargo movement through river systems. A concession agreement was signed between DPA and DP World to develop, operate and maintain a mega-container terminal at Kandla in Gujarat in the PPP mode. Further, dredging and reclamation works are likely to be implemented in the PPP mode at Vadhavan Port.
Dredging industry
With increasing draught requirements, dredging is emerging as a distinct industry. Dredging Corporation of India Limited (DCI), one of the key players in the dredging industry, is undertaking maintenance dredging works at major ports and has been actively participating in the bidding process for dredging contracts. In March 2024, DCI and BEML Limited signed an MoU aimed at advancing the design, development and manufacturing of spare parts for dredging vessels.
Moving ahead, the demand for dredging will be driven by the government’s plans to develop new waterways and greenfield ports, and modernise and expand existing ports. There is also scope for indigenous manufacturing of dredgers to reduce dependence of foreign companies.
Technology uptake and maritime sustainability
Advanced technologies are being implemented at Indian ports and national waterways to increase and improve their operational efficiency. Notably, the MoPSW launched two digital modules within the Sagar Setu (National Logistics Portal-Marine) platform to facilitate the online submission of documents, efficient monitoring of ship status at ports, planning of vessel inspections, etc. The National Technology Centre for Ports, Waterways and Coasts has developed Sagar Samriddhi, an online dredging monitoring system to accelerate the ministry’s “waste-to-wealth” initiative. Moreover, a quick pontoon opening mechanism system has been inaugurated, reducing the time required for manual dismantling and reassembly of the kulfi pontoon bridges across NW-1.
Decarbonisation and sustainable initiatives for maritime activities are at the forefront of mitigating environmental impacts at Indian ports. India is planning partnerships with the global shipping industry to explore the use of methanol and ammonia as fuels for ships. V.O. Chidambaranar Port has become the first port in India to handle green ammonia. Recently, Bharat Petroleum Corporation Limited launched a biofuel-blend high flash high speed diesel bunker at Mumbai port, aligning with the government’s vision for a clean energy future, as outlined in the National Biofuels Policy and Maritime India Vision (MIV) 2030. Inland water transportation is also creating opportunities to promote the use of electric, hybrid, hydrogen and its derivative propulsion fuels for ships.
Strengthening international relations and acquisitions
Efforts are being made to gain a foothold in strategically important foreign ports and enhance trade and investment opportunities, which will boost India’s economic development and strengthen bilateral cooperations. To this end, India has secured the operational rights for a terminal at Mongla port in Bangladesh in July 2024. It is the second largest port in Bangladesh, and lies close to the shore of the Bay of Bengal and the Pashur river. Furthermore, in May 2024, a long-term bilateral contract was signed between Indian Ports Global Limited and the Port and Maritime Organisation of Iran, enabling the operation of the Shahid Beheshti terminal at Chabahar port.
There is also significant interest in port assets. For instance, Adani Ports and Special Economic Zone Limited (APSEZL) acquired a 95 per cent stake in Gopalpur Port Limited, and the Competition Commission of India also cleared the National Investment and Infrastructure Fund’s acquisition stake in Hindustan Ports Private Limited. More recently, APSEZL entered into a definitive agreement to acquire an 80 per cent stake in Astro Offshore (an offshore support vessel operator), in an all-cash deal for $185 million.
Emerging opportunities
As India embarks on a journey to integrate with the global supply chain, technological innovation and the upgradation of port infrastructure are becoming increasingly crucial. Cruise tourism is an emerging market, with the MoPSW announcing an investment worth Rs 450 billion to develop river cruise tourism. Of this, an estimated amount of Rs 350 billion has been earmarked for cruise vessels, and Rs 100 billion for the development of cruise terminal infrastructure by 2047. Roll-on roll-off shipping has untapped potential, as it streamlines processes by allowing vehicles to be driven directly on to the ship at the port of origin and offloaded at the destination.
Moreover, the flagship Sagarmala programme, aimed at promoting port-led development, offers opportunities for various stakeholders with over 550 projects valued at approximately Rs 4 trillion currently under development or under implementation. A major infrastructure project, Jal Marg Vikas aims to augment the capacity of NW-1 as a cost-effective, environmentally friendly, alternative mode of transportation, particularly suited for bulk, hazardous and oversized cargo.
Going forward, regulations and all-encompassing plans such as MIV 2030 and the Amrit Kaal Vision 2047 will encourage the construction of new facilities and boost the maritime industry. Given the strong project pipeline, regulatory backing and increasing focus on sustainability and technology, the sector has an optimistic outlook.
Naina Gulati and Sidra Siddiquie
